Central Withholding Agreement

1 Catalog Number 13930 (Rev. 6-2018)Instructions on how to apply for a Central Withholding AgreementWhat is a Central Withholding Agreement ? Central Withholding Agreement (CWA) is a tool that can help nonresident entertainers and athletes who plan to work in the United States. A CWA provides for Withholding based upon net income at graduated BackgroundGenerally, Section 1441(a) of the Internal Revenue Code of 1986 requires all persons having the control, receipt, custody, disposal, or payment of certain items of income from sources within the United States of any nonresident alien individual, to deduct and withhold from such income a tax equal to 30 percent thereof.

2 These persons are Withholding agents. The income items subject to this Withholding include, but are not limited to, interest, dividends, rent, salaries, wages, compensations, remunerations, and emoluments. Section (b)(3) of the Income Tax Regulations provides that compensation for personal services of a nonresident alien (NRA) individual who is engaged during the taxable year in the conduct of a trade or business within the United States, may be wholly or partially exempted from Withholding if a CWA is executed between the Internal Revenue Service (IRS) and the alien individual with respect to the amount of Withholding required.

3 The regulation states that a CWA shall be available in the circumstances and in the manner set forth by the PolicyThe IRS will consider entering into a CWA permitting Withholding on projected net income at a graduated rate, as opposed to 30% of gross income, provided that all requirements of Revenue Procedure 89-47 are met. Accurately and timely completing this application will fulfill the requirements for no event will a CWA reduce the amount of withheld taxes to an amount less than the anticipated income tax to Apply for a CWAWho can apply?Individual nonresident alien (NRA) entertainers and athletes who perform or participate in events in the United States can request a CWA.

4 They may qualify for a lower rate of Withholding than 30% of gross October 1, 2018, individual nonresident alien entertainers and athletes must have calendar year-to-date gross income of at least $10,000 (including income estimated on the CWA application budget) before the NRA is eligible to apply for a Withholding Agreement . To determine whether the gross income threshold is met the IRS will include all year-to-date settlement amounts not covered by a CWA for which there has been Withholding at the proper authorized representative may apply for the NRA. To prevent unauthorized disclosures, we require a Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization, to be fully executed, giving us authority to discuss tax matters with the NRA s representative.

5 The disclosure authorization (Form 2848 or Form 8821) must be signed by the NRA. A faxed copy of this form is acceptable. If there is a need to obtain additional information from other sources, we will either request authorization for that source or will request the information through the source that already has may accept Form 2848 from an attorney, CPA, or enrolled agent. Additionally, we may accept Form 2848 if the representative is an officer of the company, a full-time employee or family member. The authorization should cover, at a minimum, a CWA for the current year, Income Tax Form 1040NR for the present and two prior years, as well as any Form 1042-S in the taxpayer s name for any year in would also accept Form 8821 from anyone else designated to receive tax return information.

6 Form 8821 authorizes any individual, corporation, firm, organization, or partnership designated to inspect and/or receive confidential information in any office of the IRS for the type of tax and the years or periods listed on Form 8821. The authorization should cover the same tax return information as shown should I apply?You must submit an application for a CWA at least 45 days before the first event covered by the CWA to allow for timely evaluation. An application received by the IRS less than 45 days before the first event covered by the application will be denied and returned to the : An artist has a performance scheduled for March 1, 2013.

7 In order for the application to be considered, it must be received by IRS 45 days prior to the performance which is January 15, 2013. If the application is received on January 16, 2013, the application will not be processed since it was not received 45 days prior to the first event. Note: For the computation of the number of days, the day of the event is not included since the application must be received prior to the first do I apply?Submit your application and all accompanying documents to: Central Withholding Agreement Program Internal Revenue Service Stop 1441 2001 Butterfield Road Downers Grove, IL.

8 60515-1050 Or by Fax 866-715-1507 Page 2 Catalog Number 13930 (Rev. 6-2018)How do I apply?You must submit a written application and appropriate only standard portion of an application for a CWA is the application form itself appearing at the end of these instructions. The remainder of the application will consist of a computer-generated letter from you explaining the facts requested below, along with the appropriate individual requesting a CWA must submit a timely application. This includes all members of the group, regardless as to whether or not they share in the profit of the tour or event.

9 This also includes any back-up singer or musician who is requesting a CWA. When requesting a CWA for multiple individuals list each individual and provide the complete information for may need to provide additional information that affects the computation or completion of the CWA that is requested by the IRS. This information must be provided by the deadline provided by the IRS when requested. Delays in response may jeopardize the approval of the CWA application must include the following statement and must either be signed by the NRA or by an authorized representative of the NRA. I wish to obtain a Central Withholding Agreement between the nonresident alien athlete/entertainer, the Withholding agent, and the Internal Revenue Service covering the services to be provided as shown.

10 Under penalties of perjury, I declare that I have examined this application, including any accompanying schedules, exhibits, affidavits, and statements and to the best of my knowledge and belief it is true, correct, and complete."Initial Application must include:1. Name of NRA(s) to be covered by CWA2. SSN or ITIN of NRA if known3. Tour dates or event to be covered4. POA for NRA as appropriate 5. Preliminary BudgetSupporting Documents Required to Evaluate Your Application1. Complete all boxes on the application form at the end of these instructions with information regarding the NRA, the Withholding agent and an alternate contact representative, if desired.